4 ms·

How is the digital euro saved? Is it insured? Does it earn interest?

baq 1y ago
it's a personal account in the ECB, it's insured by the ECB's digital printer and interest will likely be whatever the ECB decides; it'll need to pick a value that doesn't blow up commercial banks as the article says, and even if does and chooses a very low deposit limit, it'll still cause stress. > The study, requested by European legislators, was aimed at evaluating the risks that a digital currency, essentially an electronic wallet guaranteed by the ECB, would pose to the banking sector under different scenarios, including a hypothetical "flight to safety".
- dinkblam 1y ago
  > it'll need to pick a value that doesn't blow up commercial banks as the article says, and even if does and chooses a very low deposit limit, it'll still cause stress. or, more likely, everyone in the EU will ignore this "digital euro" nonsense and it will just be another unnecessary waste of taxpayer money.
  - baq 1y ago
    that's the best case scenario.
  - naldb 1y ago
    How will you ignore it when they outlaw cash?
    - logicchains 1y ago
      The EU doesn't have anything close to the police force necessary to enforce a cash ban in the face of public opposition, and doesn't have the money to pay for one.
      - ForHackernews 1y ago
        If there are no ATMs, and no shops accept cash, and they no longer mint Euro currency, what is there to enforce? This is effectively already the case in parts of Scandinavia.
        logifail 1y ago
        > This is effectively already the case in parts of Scandinavia Ironically this isn't quite as consequence-free as some people thought: "In 2018 a former deputy governor of Sweden’s central bank predicted that by 2025 the country would probably be cashless. Seven years on, that prediction has turned out to be pretty much true. Just one in 10 purchases are made with cash, and card is the most common form of payment, followed by the Swedish mobile payment system Swish, launched by six banks in 2012 and now ubiquitous. Other mobile phone payment services are also growing quickly. In fact, according to the central bank’s annual payments report, published this month, Sweden and Norway have the lowest amount of cash in circulation, as a percentage of GDP, in the world. But in the context of today, with war in Europe, unpredictability in the US and the fear of Russian hybrid attacks almost a part of daily life in Sweden, life without cash is not proving the utopia that perhaps it once promised to be. Such is the perceived severity of the situation that the authorities are trying to encourage citizens to keep and use cash in the name of civil defence..." https://www.theguardian.com/technology/2025/mar/16/sweden-cash-digital-payments-electronic-banking-security https://www.theguardian.com/technology/2025/mar/16/sweden-ca...
      - mirko22 1y ago
        Can you elaborate why they would need more police to ban cash?
  - bondant 1y ago
    I really don't understand the hostility here. The digital euro seems like a good way to reduce the power of companies like visa and mastercard, and reduce the fees too. If the government is providing a way to pay freely in a digital way, why would I pay a company to do the same (or worse, see the last scandal between the card companies and steam)?
    - nyeah 1y ago
      1. You can easily have a local payments system without creating a new digital currency. So it's not hard to make people wonder, in perfectly good faith, why those two distinct ideas are being bundled right now. 2. Before you portray disagreement as "hostility," please try to keep the site code of conduct in mind.
    - mirko22 1y ago
      What makes you think that card comapnies/steam scandal wouldn’t happen with digital euro. EU could easily put some constraints on money usage and they wouldn’t need to justify it to anyone… And the hostility probably come from experience with EU that makes decisions solely in interest of politicians and corporations instead of EU citizens in my opinion.
- arielcostas 1y ago
  I believe the idea is not to provide any interest rate, precisely so people will be inclined to hold their savings in a "regular" bank, and only use the digital euro as a "wallet" with amount limits and no interest, similar to holding the cash yourself.
  - rsynnott 1y ago
    That is certainly what the banks would prefer to happen; currently people are essentially forced to subsidised banks, as pretty much everyone these days is paid by bank transfer into a current account which likely pays little if any interest. It's less clear that it would make sense not to pay interest from the ECB's pov.
cryptonym 1y ago
Paper and coins euro doesn't come with interest, I don't see why digital would. That'd still be the job of a bank.
- bitmasher9 1y ago
  It’s not “digital cash”, there is no such thing as “digital cash.” It’s an account that a person has with a bank that’s intended for routine transactions, so it’s closer to a checking account than physical cash.
  - cryptonym 1y ago
    Still doesn't mean you should get interest just for holding digital euros. That sounds like multiplying inflation. Maybe a specific bank account could provide interest for a specific reason, but the digital currency?
  - deleted 1y ago
    [deleted]
Ekaros 1y ago
Good thing about central bank holding it is that you do not need insurance. It cannot fail. All the currency that exist exists there. It is impossible for central bank to fail to fulfil their obligations or they just print more. Bank failures comes from banks using deposits. Which can result in banks assets to be lower than deposits, say if interest rates have recently rised. Central banks should be instead fully backed. I see no reason not to have some guide rate being paid... Or in worst case taken away. ECB set the rate to negative at one point... So that might happen again. So rate they pay might end up being negative meaning they charge you...

baq 1y ago

it's a personal account in the ECB, it's insured by the ECB's digital printer and interest will likely be whatever the ECB decides; it'll need to pick a value that doesn't blow up commercial banks as the article says, and even if does and chooses a very low deposit limit, it'll still cause stress. > The study, requested by European legislators, was aimed at evaluating the risks that a digital currency, essentially an electronic wallet guaranteed by the ECB, would pose to the banking sector under different scenarios, including a hypothetical "flight to safety".

dinkblam 1y ago
> it'll need to pick a value that doesn't blow up commercial banks as the article says, and even if does and chooses a very low deposit limit, it'll still cause stress. or, more likely, everyone in the EU will ignore this "digital euro" nonsense and it will just be another unnecessary waste of taxpayer money.
- baq 1y ago
  that's the best case scenario.
- naldb 1y ago
  How will you ignore it when they outlaw cash?
  - logicchains 1y ago
    The EU doesn't have anything close to the police force necessary to enforce a cash ban in the face of public opposition, and doesn't have the money to pay for one.
    - ForHackernews 1y ago
      If there are no ATMs, and no shops accept cash, and they no longer mint Euro currency, what is there to enforce? This is effectively already the case in parts of Scandinavia.
      - logifail 1y ago
        > This is effectively already the case in parts of Scandinavia Ironically this isn't quite as consequence-free as some people thought: "In 2018 a former deputy governor of Sweden’s central bank predicted that by 2025 the country would probably be cashless. Seven years on, that prediction has turned out to be pretty much true. Just one in 10 purchases are made with cash, and card is the most common form of payment, followed by the Swedish mobile payment system Swish, launched by six banks in 2012 and now ubiquitous. Other mobile phone payment services are also growing quickly. In fact, according to the central bank’s annual payments report, published this month, Sweden and Norway have the lowest amount of cash in circulation, as a percentage of GDP, in the world. But in the context of today, with war in Europe, unpredictability in the US and the fear of Russian hybrid attacks almost a part of daily life in Sweden, life without cash is not proving the utopia that perhaps it once promised to be. Such is the perceived severity of the situation that the authorities are trying to encourage citizens to keep and use cash in the name of civil defence..." https://www.theguardian.com/technology/2025/mar/16/sweden-cash-digital-payments-electronic-banking-security https://www.theguardian.com/technology/2025/mar/16/sweden-ca...
    - mirko22 1y ago
      Can you elaborate why they would need more police to ban cash?
- bondant 1y ago
  I really don't understand the hostility here. The digital euro seems like a good way to reduce the power of companies like visa and mastercard, and reduce the fees too. If the government is providing a way to pay freely in a digital way, why would I pay a company to do the same (or worse, see the last scandal between the card companies and steam)?
  - nyeah 1y ago
    1. You can easily have a local payments system without creating a new digital currency. So it's not hard to make people wonder, in perfectly good faith, why those two distinct ideas are being bundled right now. 2. Before you portray disagreement as "hostility," please try to keep the site code of conduct in mind.
  - mirko22 1y ago
    What makes you think that card comapnies/steam scandal wouldn’t happen with digital euro. EU could easily put some constraints on money usage and they wouldn’t need to justify it to anyone… And the hostility probably come from experience with EU that makes decisions solely in interest of politicians and corporations instead of EU citizens in my opinion.
arielcostas 1y ago
I believe the idea is not to provide any interest rate, precisely so people will be inclined to hold their savings in a "regular" bank, and only use the digital euro as a "wallet" with amount limits and no interest, similar to holding the cash yourself.
- rsynnott 1y ago
  That is certainly what the banks would prefer to happen; currently people are essentially forced to subsidised banks, as pretty much everyone these days is paid by bank transfer into a current account which likely pays little if any interest. It's less clear that it would make sense not to pay interest from the ECB's pov.

cryptonym 1y ago

Paper and coins euro doesn't come with interest, I don't see why digital would. That'd still be the job of a bank.

bitmasher9 1y ago
It’s not “digital cash”, there is no such thing as “digital cash.” It’s an account that a person has with a bank that’s intended for routine transactions, so it’s closer to a checking account than physical cash.
- cryptonym 1y ago
  Still doesn't mean you should get interest just for holding digital euros. That sounds like multiplying inflation. Maybe a specific bank account could provide interest for a specific reason, but the digital currency?
- deleted 1y ago
  [deleted]

Ekaros 1y ago

Good thing about central bank holding it is that you do not need insurance. It cannot fail. All the currency that exist exists there. It is impossible for central bank to fail to fulfil their obligations or they just print more. Bank failures comes from banks using deposits. Which can result in banks assets to be lower than deposits, say if interest rates have recently rised. Central banks should be instead fully backed. I see no reason not to have some guide rate being paid... Or in worst case taken away. ECB set the rate to negative at one point... So that might happen again. So rate they pay might end up being negative meaning they charge you...